South Carolina Supreme Court Holds that Nursing Home Waived Right to Enforce Arbitration Agreement – Johnson v. Heritage Healthcare of Estill, LLC

wooden gavel

Nursing home owners do not like jury trials. In fact, the idea of a jury comprised of everyday men and women determining whether a nursing home neglected a patient and, if so, awarding damages to a patient or the patient’s family is so distasteful to many nursing home owners that they require a patient or his or her representative to sign an arbitration agreement – a contractual promise to arbitrate, rather than litigate through the court system, any disputes that arise between the parties – prior to admission.

When negligence lawsuits and other nursing home cases are determined through arbitration, the patient and the patient’s family lose the right to have a jury decide the case. Often, the family does not fully understand the implication of this distinction at the time the papers are signed.

Facts of the Case

In the recent case of Johnson v. Heritage Healthcare of Estill, LLC, the plaintiff was the personal representative of the estate of a patient who was admitted to the defendant nursing home in 2007. The personal representative, who was the patient’s daughter, held a general power of attorney for the patient and signed an arbitration agreement on the patient’s behalf when she was admitted to the nursing home. The patient developed severe pressure ulcers that resulted in the amputation of her leg. She died in 2009.

The personal representative, who was appointed guardian ad litem for the patient prior to her death, filed a wrongful death and survival action against the defendant in October 2010. The defendant, in turn, filed an answer asserting arbitration as a defense and served arbitration-related discovery requests upon the personal representative.

In August 2011, the nursing home filed a motion to compel arbitration. The circuit court denied the motion. The nursing home appealed, and the court of appeals reversed the trial court’s order. The South Carolina Supreme Court granted the personal representative’s petition for a writ of certiorari to review the intermediate appellate court’s decision.

The Holding of the State Supreme Court

The state’s highest court reversed the court of appeals’ decision, holding that the nursing home had waived its right to enforce the arbitration agreement. The court first noted that the party seeking to establish a waiver of a contractual right to compel arbitration has the burden of showing prejudice through an undue burden caused by the opposing party’s delay in making a demand to arbitrate and that such determinations are largely fact-driven.

The court observed that the initial dispute between the personal representative and the nursing home occurred because the nursing home refused to release the patient’s records to the personal representative, even though she held a power of attorney, was a court-appointed guardian ad litem, and was the personal representative of the patient’s estate after she passed away. The nursing home’s refusal to release the records resulted in unnecessary litigation expenses, as did the nursing home’s failure to comply with certain discovery requests once suit was filed. Coupled with the months-long delay in seeking to compel arbitration, the court found that the personal representative had established the prejudice necessary to overcome the nursing home’s motion to compel arbitration.

For Advice About a Possible Nursing Home Abuse Case

If you have a loved one who is showing symptoms of abuse or neglect – or has died – while confined to a nursing home or another long-term care facility, results-driven South Carolina nursing home abuse attorney Patrick E. Knie can review the facts and determine whether the nursing home may be liable. Call us for a free consultation at 864-582-5118. We have offices in both Spartanburg and Greenville, from which we assist clients throughout the state.

Related Blog Posts

Deceased Nursing Home Patient’s Estate Was Not Bound by Arbitration Agreement Signed by Patient’s Son – Thompson v. Pruitt Corporation

Plaintiffs in South Carolina Nursing Home Negligence Suit Entitled to Review of Trial Court’s Bifurcation of Corporate Defendants Prior to Trial – Morrow v. Fundamental Long-Term Care Holdings, LLC